Extends time municipalities have to commit fees and
payments-in-lieu of constructing affordable units to six years.

CURRENT VERSION OF TEXT

As introduced.

An Actconcerning affordable housing development fees
and payments-in-lieu of constructing affordable units and amending P.L.1985,
c.222 and P.L.2008, c.46.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 4 of P.L.1985,
c.22 (C.52:27D-304) is amended to read as follows:

4. As used in this act:

a. "Council"
means the Council on Affordable Housing established [in this act]by section 5 of P.L.1985, c.222 (C.52:27D-305), which shall have primary
jurisdiction for the administration of housing obligations in accordance with
sound regional planning considerations in this State.

b. "Housing
region" means a geographic area of not less than two nor more than four
contiguous, whole counties which exhibit significant social, economic and
income similarities, and which constitute to the greatest extent practicable
the primary metropolitan statistical areas as last defined by the United States
Census Bureau prior to the effective date of P.L.1985, c.222 (C.52:27D-301 et
al.).

c. "Low income
housing" means housing affordable according to federal Department of Housing
and Urban Development or other recognized standards for home ownership and
rental costs and occupied or reserved for occupancy by households with a gross
household income equal to 50% or less of the median gross household income for
households of the same size within the housing region in which the housing is
located.

d. "Moderate income
housing" means housing affordable according to federal Department of
Housing and Urban Development or other recognized standards for home ownership
and rental costs and occupied or reserved for occupancy by households with a
gross household income equal to more than 50% but less than 80% of the median
gross household income for households of the same size within the housing
region in which the housing is located.

e. "Resolution of
participation" means a resolution adopted by a municipality in which the
municipality chooses to prepare a fair share plan and housing element in
accordance with this act.

f. "Inclusionary
development" means a residential housing development in which a
substantial percentage of the housing units are provided for a reasonable
income range of low and moderate income households.

g. "Conversion"
means the conversion of existing commercial, industrial, or residential
structures for low and moderate income housing purposes where a substantial
percentage of the housing units are provided for a reasonable income range of
low and moderate income households.

h. "Development"
means any development for which permission may be required pursuant to the
"Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).

j. "Prospective
need" means a projection of housing needs based on development and growth
which is reasonably likely to occur in a region or a municipality, as the case
may be, as a result of actual determination of public and private entities. In
determining prospective need, consideration shall be given to approvals of
development applications, real property transfers and economic projections
prepared by the State Planning Commission established by sections 1 through 12
of P.L.1985, c.398 (C.52:18A-196 et seq.).

k. "Disabled
person" means a person with a physical disability, infirmity, malformation
or disfigurement which is caused by bodily injury, birth defect, aging or
illness including epilepsy and other seizure disorders, and which shall
include, but not be limited to, any degree of paralysis, amputation, lack of
physical coordination, blindness or visual impediment, deafness or hearing
impediment, muteness or speech impediment or physical reliance on a service or
guide dog, wheelchair, or other remedial appliance or device.

l. "Adaptable"
means constructed in compliance with the technical design standards of the
barrier free subcode adopted by the Commissioner of Community Affairs pursuant
to the "State Uniform Construction Code Act," P.L.1975, c.217
(C.52:27D-119 et seq.) and in accordance with the provisions of section 5 of
P.L.2005, c.350 (C.52:27D-123.15).

m. "Very low income
housing" means housing affordable according to federal Department of
Housing and Urban Development or other recognized standards for home ownership
and rental costs and occupied or reserved for occupancy by households with a
gross household income equal to 30% or less of the median gross household
income for households of the same size within the housing region in which the
housing is located.

n. “Eligible county”
shall mean any county that has established or establishes at any time
subsequent to the effective date of P.L., c.(C.) (pending before the
Legislature as this bill) a “CountyHomelessness
Trust Fund” pursuant to section 5 of P.L.2009, c.123 (C.52:27D-287e), or that
serves as an “urban county” pursuant to section 102(a)(6) of the “Housing and
Community Development Act of 1974,” Pub.L.93-383 (42U.S.C. s.5302(a)(6)) for
the
purposes of undertaking community development and housing assistance
activities.

(cf: P.L.2008, c.46, s.5)

2. Section 8 of P.L.2008,
c.46 (C.52:27D-329.2) is amended to read as follows:

8. a. The council may
authorize a municipality that has petitioned for substantive certification, or
that has been so authorized by a court of competent jurisdiction, and which has
adopted a municipal development fee ordinance to impose and collect development
fees from developers of residential property, in accordance with rules
promulgated by the council. Each amount collected shall be deposited and shall
be accounted for separately, by payer and date of deposit.

A municipality may not spend
or commit to spend any affordable housing development fees, including Statewide
non-residential fees collected and deposited into the municipal affordable
housing trust fund, without first obtaining the council's approval of the
expenditure. The council shall promulgate regulations regarding the
establishment, administration and enforcement of the expenditure of affordable
housing development fees by municipalities. The council shall have exclusive
jurisdiction regarding the enforcement of these regulations, provided that any
municipality which is not in compliance with the regulations adopted by the
council may be subject to forfeiture of any or all funds remaining within its
municipal trust fund. Any funds so forfeited shall be deposited into the
"New Jersey Affordable Housing Trust Fund" established pursuant to
section 20 of P.L.1985, c.222 (C.52:27D-320).

b. A municipality shall
deposit all fees collected, whether or not such collections were derived from
fees imposed upon non-residential or residential construction into a trust fund
dedicated to those purposes as required under this section, and such additional
purposes as may be approved by the council.

c. (1) A municipality may
only spend development fees for an activity approved by the council to address
the municipal fair share obligation.

(2) Municipal development
trust funds shall not be expended to reimburse municipalities for activities
which occurred prior to the authorization of a municipality to collect
development fees.

(3) A municipality shall set
aside a portion of its development fee trust fund for the purpose of providing
affordability assistance to low and moderate income households in affordable
units included in a municipal fair share plan, in accordance with rules of the
council.

(a) Affordability assistance
programs may include down payment assistance, security deposit assistance, low
interest loans, common maintenance expenses for units located in condominiums,
rental assistance, and any other program authorized by the council.

(b) Affordability assistance
to households earning 30 percent or less of median income may include buying
down the cost of low income units in a municipal fair share plan to make them
affordable to households earning 30 percent or less of median income. The use
of development fees in this manner shall not entitle a municipality to bonus
credits except as may be provided by the rules of the council.

(4) A municipality may
contract with a private or public entity to administer any part of its housing
element and fair share plan, including the requirement for affordability
assistance, or any program or activity for which the municipality expends
development fee proceeds, in accordance with rules of the council.

(5) Not more than 20 percent
of the revenues collected from development fees shall be expended on
administration, in accordance with rules of the council.

d. The council shall
establish a time by which all development fees collected within a calendar year
shall be expended; provided, however, that all fees shall be committed for
expenditure within [four]six years from
the date of collection. A municipality that fails to commit to expend the
balance required in the development fee trust fund by the time set forth in
this section shall be required by the council to transfer the remaining unspent
balance at the end of the [four-year]six-year period to
its county government if its county is an eligible county, and otherwise to
the "New Jersey Affordable Housing Trust Fund," established pursuant
to section 20 of P.L.1985, c.222 (C.52:27D-320), as amended by P.L.2008, c.46
(C.52:27D-329.1 et al.), to be used in the housing region of the transferring
municipality for the authorized purposes of that fund. Any eligible county
receiving funds under this section shall deposit all funds collected into a
trust fund dedicated to those purposes, and accounted for separately from any
other revenue collected by the county, as is required of municipalities under
this section, shall adopt written procedures and funding guidelines by which
qualified applicants may apply to use such funds to build, rehabilitate or
preserve housing for low and moderate income households, and shall
expeditiously distribute those funds to qualified applicants.

e. Notwithstanding any
provision of this section, or regulations of the council, a municipality shall
not collect a development fee from a developer whenever that developer is
providing for the construction of affordable units, either on-site or elsewhere
within the municipality.

This section shall not apply
to the collection of a Statewide development fee imposed upon non-residential
development pursuant to sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1
et seq.) by the State Treasurer, when such collection is not
authorized to be retained by a municipality.

(cf: P.L.2008, c.46, s.8)

3. Section 9 of P.L.2008,
c.46 (C.52:27D-329.3) is amended to read as follows:

9. a. The council may
authorize a municipality that has petitioned for substantive certification to
impose and collect payments-in-lieu of constructing affordable units on site
upon the construction of residential development, which payments may be imposed
and collected as provided pursuant to the rules of the council.
Payment-in-lieu fees shall be deposited into a trust fund, and accounted for
separately from any other fees collected by a municipality. Whenever a
payment-in-lieu is charged by a municipality pursuant to this subsection, a
development fee authorized pursuant to section 8 of P.L.2008, c.46
(C.52:27D-329.2) shall not be charged in connection with the same development.

b. A municipality shall
commit to expend collections from payments-in-lieu imposed pursuant to
subsection a. of this section within [four]six years of the
date of collection. The council may extend this deadline if the municipality
submits sufficient proof of building or other permits, or other efforts
concerning land acquisition or project development. The council shall provide
such administrative assistance as may be required to aid in the construction of
affordable housing units. A municipality that fails to commit to expend the
amounts collected pursuant to this section within the timeframes established shall
be required to transfer any unexpended revenue collected pursuant to subsection
a. of this section to its county government if its county is an eligible
county, and otherwise to the "New Jersey Affordable Housing Trust
Fund," established pursuant to section 20 of P.L.1985, c.222
(C.52:27D-320), to be used within the same housing region for the authorized
purposes of that fund, in accordance with regulations promulgated by the
council. Any eligible county receiving funds under this section shall
deposit all funds collected into a trust fund dedicated to those purposes, and
accounted for separately from any other revenue collected by the county, as is
required of municipalities under this section, shall adopt written procedures
and funding guidelines by which qualified applicants may apply to use such
funds to build, rehabilitate or preserve housing for low and moderate income
households, and shall expeditiously distribute those funds to qualified applicants.

(cf: P.L.2008, c.46, s.9)

4. This act shall take
effect immediately.

STATEMENT

This bill extends the time
period in which a municipality must commit to expend collected development fees
and payments-in-lieu of constructing affordable units held in a municipal trust
fund, from four years after the date of collection to six years after the date
of collection, and requires towns that fail to expend all of their trust funds
to transfer them to their county governments for the production and
rehabilitation of homes in the same county.

Under current law, a
municipality that fails to commit to expend the balance required in the
municipal trust fund within four years is required to transfer the remaining
unspent balance at the end of the four-year period to the “New Jersey Housing
Trust Fund” to be used in the housing region of the transferring municipality
for the authorized purposes of that fund.